via NRZ fails to lure investors | The Herald 7 August 2014 by Farirai Machivenyika
The National Railways of Zimbabwe is failing to lure potential investors to revive its operations because of depressed business that has seen volumes of freight falling from 9,6 million tonnes in 2000 to 3,71 million tonnes last year. This was revealed by the Permanent Secretary in the Ministry of Transport and Infrastructural Development, Mr Munesu Munodawafa, on Tuesday when he appeared before the Public Accounts Committee, together with management from NRZ to give evidence on the company’s 2011 audited accounts.
“The (National) Railways has been studied by a number of companies, particularly from the Eastern bloc, but the major challenge that is there and why we have not moved is the aspect of the level of business because obviously any investor would want a return,” he said.
“When we go through the statistics and indicate that for last year we only moved 3,71 million (tonnes) and the break-even point is five million, there will obviously be some element of scepticism on whether they can recoup their investment or how long it would take to recoup their investment.”
Mr Munodawafa said they were negotiating with two unnamed companies to enter into partnerships with the rail transport utility.
“We have two institutions that we are talking to and they are currently going through the due diligence. So I would plead that we allow that process to go through,” he said.
The NRZ is in talks with the Development Bank of South Africa for a US$400 million loan for short-term recapitalisation, while over US$1 billion is needed to completely overhaul its infrastructure. The NRZ is facing a myriad challenges that have resulted in the parastatal accruing arrears of at least US$52 million in statutory obligations, including an equivalent of nine months’ pay to employees.
Despite failure to pay its workers, NRZ management ruled out retrenchments.
COMMENTS
Nothing works chabatwa naMugabe and his cronies
OH, that’s right, “obviously any investor would want a return.” Guess ZANU forgot the rules of global finance when they concocted their indiginization policy. Now the country is untouchable for FDI and it has nothing to do with so-called sanctions on Mugabe and Dis-Grace.
What kind of fool works for nine months without pay???
Shows that potential investors are reading our posts, cool!
When is ZANU PF going to admit they have failed? I doubt they will, because it’s those da[m]n sanctions! There is no corruption, bad economic policies, lawlessness or looting. I assure you comrades, it’s the da[m]n sanctions!
the nrz fails to lure idiots to invest in its cashberts.
Railways are 200 years old technology. Even this is way to advanced for ZANU management capability.
If the railways work reliably the volumes will go up. The volumes are down because NRZ cannot move the goods or steal the goods or break the goods or deliver months late or overcharge or all of these things at once
I use to be an external auditor on the Morewear Industries group of companies which manufactured rolling stock, coaches etc for what was Rhodesia Railways. The company also exported railway stock to neighboring countries. Rhodesia Railways like most railways in the world were not as profitable as the other parastatals like Air Rhodesia but at least it was efficient and pushed Rhodesia’s imports and exports with great efficiency. Within 30 years or so Zanu PF gradually saw its inability and its failure to make things work. Hence Zimbabwe Railways was not spared. Zanu PF destroyed everything Smith left behind. All we have now is a corrupt Zanu PF, a clueless president who have nothing to show except dead wood
The only thing ZPF is good for as a laughing stock and great case study for economic, finance and political students the world over on how to destroy a once vibrant economy. (Clearly also good for a few long years in Chikurubi for all their crimes.)
For its failings, the Rhodesian economy was the admiration of the world. The potential was there to overcome South Africa in national GDP. There were more black millionaires in 1978 Rhodesia than in all of the neighboring countries. Minus the racism of the day, including the qualified franchise, Rhodesia would be first-world by now. The immigration to South Africa would be in reverse.
Which would be okay because Zimbos would be wealthy enough to need unskilled labour such as domestics.
So much potential.
How can you invest in a kleptocracy we had electric rail between gwelo and Harare and the locals stole the electric cabling?who wants invest in that? Got to be out of your mind if you do!
The truth of the matter is that the Railways has gone totally backwards. At independence (if you can really call it that) the line between Bulawayo and Gweru and Somabhula to Beitbridge was run by a system called C.T.C. CTC consolidates train routing decisions that were previously carried out by local signal operators or the train crews themselves. The system consists of a centralized train dispatcher’s office that controls railroad interlockings and traffic flows in portions of the rail system designated as CTC territory. One hallmark of CTC is a control panel with a graphical depiction of the railroad. On this panel the dispatcher can keep track of trains’ locations across the territory that the dispatcher controls. Larger railroads may have multiple dispatcher’s offices and even multiple dispatchers for each operating division. These offices are usually located near the busiest yards or stations, and their operational qualities can be compared to air traffic towers. Key to the concept of CTC is the notion of traffic control as it applies to railroads. Trains moving in opposite directions on the same track cannot pass each other without special infrastructure such as sidings and switches that allow one of the trains to move out of the way. Initially the only two ways for trains to arrange such interactions was to somehow arrange it in advance or provide a communications link between the authority for train movements (the dispatcher) and the trains themselves. These two mechanisms for control would be formalized by railroad companies in a set of procedures called train order operation, which was later partly automated through use of Automatic Block Signals.
Because of corruption and mis management they had to revert to the Paper order system. The system uses a set of rules when direct communication between train dispatchers and trains was limited or non-existent. Trains would follow a predetermined operating plan, known as the time table, unless superseded by train orders conveyed to the train from the dispatcher, through local intermediaries. Train order operation was a system that required minimum human overhead in an era before widespread use of technology-based automation. It is the most practical way for railroads with limited capital resources, or lines with limited traffic, to operate.
When communications fail which is regularly they revert to an even older system. The Wooden Train Staff which requires the use of a token.In railway signalling, a token is a physical object which a locomotive driver is required to have or see before entering onto a particular section of single track. The token is clearly endorsed with the name of the section it belongs to. A token system is used for single lines because of the very much greater risk of serious collision in the event of irregular working by signalmen or traincrews, than on double lines.
The operation of a bidirectional single track line has obvious problems, the most serious of which is the possibility of two trains traversing the line travelling towards each other, both drivers unaware that the other is using the line. The simplest method of controlling such a line is to have only one engine operational, on the basis that a single train cannot collide with itself, and in the absence of another engine, there is nothing else for it to collide with. Such a system is known as “one engine in steam”.. The main problem with such a scheme is that it is best suited to a completely isolated branch of single track line. Where the section has to be integrated into a larger railway system, it becomes exceptionally limiting in the level of operations that it allows, and the opportunity for a mistake to be made, and an ensuing accident to occur, is high.
Instead, rather than rely on a single engine, reliance is placed on having a single physical object available for the single track section and ruling that only if an engine driver is in physical possession of that object, is he permitted to enter the single line section. That object is known as a token and is marked to indicate to which single track section it belongs.
That is one of the many reasons why the NRZ cannot meet its goals.
Invest in Zim? Yeah right. I am a Zimbabwean and as black as we come but I would not put my money in Zimbabwe, I lost enough already. There are better places to invest within the region where your rights and security as an investor are respected, countries in which the policy and laws are not transient and change like clouds in a storm. Ask yourself why so many companies have moved their HQs from Harare to South Africa, Botswana etc. If you do invest in Zimbabwe do not cry out when fruits of your handwork are taken away from you and you will not have any recourse.
I wish some Shona people would stop this claim of Zimbabweans being the most educated people; this is so embarassing now. Never admit you are from Zimbabwe to foreigners – they will surely have a field day!